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I believe the business may have pay me $10k over my basis that

Customer Question
I had in my c...
I believe the business may have pay me $10k over my basis that I had in my c corp 3 member LLC. How do I correct this mistake. This will have to be reported on our returns next year when we file. Should I put that money back in as quickly as possible for this year.
Submitted: 5 years ago.Category: Tax
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Answered in 10 minutes by:
12/2/2011
Tax Professional: Lev, Tax Advisor replied 5 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,131
Experience: Taxes, Immigration, Labor Relations
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Hi and welcome to Just Answer!
That depends on your intention...
If you choose the LLC to be treated as C-corporation - it would be a separate taxing entity and should pay its own income taxes.

Your relations with Corporation is based on two items:

- as an employee of C-corporation you are entitled to receive compensation that is generally treated as wages.

- as a shareholder - you might receive dividends according to the number of shares you own.

If C-corporation overpaid you - you better to return the money before the end of the tax year to avoid possible tax consequences.
Let me know if you need any help or clarification.

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Customer reply replied 5 years ago
What would be the tax consequences if I can't pay it all back at present? Just curious
Tax Professional: Lev, Tax Advisor replied 5 years ago
If the payment is returned withing the tax year - it is treated as never paid and there will not be any tax consequences.
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,131
Experience: Taxes, Immigration, Labor Relations
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